Acurity Health earnings slip 25% as Bowen upgrade costs take a toll
The private hospital operator's revenue falls 1.4% and it expects annual profit to be up to 25% lower.
Acurity Health, the private hospital operator formerly known as Wakefield Health, reports a 25% drop in first-half earnings as the cost of upgrading its Bowen Hospital site weighs on the bottom line.
It expects annual profit will fall by as much as a quarter.
Net profit declined to $2.4 million, or 14 cents per share, in the six months ended September 30 from $3.2 million, or 22 cents, a year earlier, the Wellington-based company says in a statement.
Revenue fell 1.4% to $40.6 million as private healthcare volumes were subdued and demand for Accident Compensation Corp-paid surgery outpaced available funding.
The group downgraded its flat annual earnings outlook, saying net profit is expected to be between 20% and 25% lower than a year earlier.
"The company is experiencing significant month-on-month volatility in workflows and making predictions in this environment is difficult," chairman Alan Isaac says. "Private demand remains somewhat subdued and we have continued to see a slight decline in the total number of New Zealanders with private health insurance."
Last week Acurity chief executive Andrew Blair announced his resignation, effective from next March, marking a changing of the guard, with chief financial officer Bevan Miller also on the way out.
Acurity's biggest shareholders, the Stewart family and Royston Hospital Trust Board, took control of the company in September, pooling their investments into a joint vehicle called Medusa.
The company expects to realise some $2.7 million from its 12% stake in Boulcott Clinic in the current financial year.
The board declared an interim dividend of 6% a share, down from 7 cents a year earlier, to be paid on December 7. The shares were unchanged at $5.90 today and have rallied 23% this year.
(BusinessDesk)
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Acurity Health earnings slip 25% as Bowen upgrade costs take a toll
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